SANTA ANA : Rancho Santiago in Fund-Raising Drive

Rancho Santiago College officials announced Tuesday that they are embarking on a fund-raising effort that could bring more than $5 million to the college in 20 years.

To receive the money, which is awarded through the U.S. Department of Education’s Endowment Challenge Grants program, the school must raise $500,000 by October, 1991, said David Valentine, a member of the Rancho Santiago College Foundation Board of Directors.

“This is certainly historic,” Valentine said. “We have never raised $500,000 before and we’ve never had the possibility of having this big a chunk of money come in.”

If the college raises the $500,000, it will receive an additional $1 million from the federal government, which has agreed to pay the college $2 for every dollar it raises.

Although the college will not be able to spend any of the $1.5 million for 20 years, it will have access to 50% of the interest. That would amount to a minimum of $2.5 million over the next 20 years, Valentine said.

The $1.5 million and the remaining 50% interest must remain invested for 20 years. After that, the college will be able to spend both the principal and the interest, which together are expected to be at least $5 million, Valentine said.

Fund-raising efforts, which have already yielded $100,000, are being led by the mayors of Santa Ana, Orange and Garden Grove, the three cities in which the college has campuses.

“This college plays an extremely important role in Santa Ana,” Santa Ana Mayor Daniel H. Young said. “Thousands of our students continue their higher education here so we’re very interested in the success of the school. I think the financial goals we have set are very much achievable.”

The college, which celebrated its 75th anniversary this year, plans to use the money for student and faculty support programs, scholarships, athletic equipment and facilities, classroom equipment and materials, and new library books.